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We've taken a dive in the last week, but so far it's only a quick drop to periscope depth. And yet, while traders scan the surface waters directional indicators, they "stand at the ready" to dive and plunge deeper if necessary to avoid those depth charge dropping destroyers. So far we are still cruising just below the surface, but still .............
Easter weekend brought bad news. Good Friday turned out not to be so good. And even after pondering Friday's news everyone seemed ready to sell and run off Monday morning. Trading triggers seemed to get hit in every direction. And yet it was not a calamity by any means. Volatility is up. Volume is up, though nothing earth shattering. The VIX jumped over it's 50 SMA and even broke the 20 level on Tuesday, but was turned back at the 100 SMA as if a door was slammed shut on it's rise. The VIX is now stuck between the 50 SMA and the 100 SMA.
Surprisingly, the defensive, conservative DIA looks the worst of the three major indexes. The SPY looks a bit better and the QQQ's even better! Some would say it's due to AAPL. Me, I just look at the charts, as they tell the story without regard to emotional influence. The simple answer is that tech and the QQQ's have done much better over the last 8 months. The August slump last year did not have the same profound impact on tech, hence it's chart looks better after this years run up.
Where are we headed? Hard to tell with any degree of certainty. The daily chart for the DIA is back to a consolidation mode under the 50 SMA. And being under the 50 SMA is not a plus for the Bulls. Price is even below last years high (see 3 day chart). And on top of that this week's attempt to break back over the 50 SMA failed. So the Bears have the cards for now.
Minor support is at 128, after which the 100 SMA comes into play at 125.76 (Yes, there is "rounder" support at 126). So essentially it's a wait and see game next week. China is going to let it's currency move a bit more, but I don't think that's a big market mover. If the DIA closes below 128, there is a high probability that we will go down to the 126 level or the 100 SMA. There's really not much in between to stop the fall.
The daily SPY look a bit better but is essentially in the same boat. The QQQ's are still above the 50 SMA and hopefully can hold that support level of they break 66.
And don't forget Columbo, the world's greatest detective. Huh? What? No way! You don't remember what Columbo said? OMG! Ok, Ok, for the un-informed, the un-initiated, and those who have reached that certain age that is filled with forgetfulness.... here ya go.
Here's what Columbo always said when looking at a stock chart. Oh, right....... crime scene.
"What's there now that wasn't there before?
What was there before that isn't there now?
And............. what's been moved?"
Remember that as you look at the charts below!!
Here's the charts and the trends.
CURRENT MARKET TRENDS
Short Term (Daily Chart) – Down
Medium Term (3 day chart) – Down
Long Term (Weekly Chart) – Up
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